Private Equity Activity Accelerates as Sponsors Deploy Record Dry Powder

Private equity firms unveiled a series of new deals on Wednesday, highlighting a marked pickup in transaction activity during the final quarter of 2025.

Several mid- to large-cap buyouts were announced across healthcare, technology, and consumer sectors, alongside numerous add-on acquisitions by existing portfolio companies. Financing conditions have improved meaningfully as interest rates stabilize.

“Sponsors are finally finding common ground with sellers on valuation,” said one partner at a major buyout firm. “The bid-ask spread has narrowed considerably in recent months.”

Global dry powder sits at record levels above $3.2 trillion, creating pressure to deploy capital. Many funds raised in 2021–2022 vintage years are now past their typical investment period midpoint.

Banks reported robust pipelines for leveraged loan and private credit commitments. Spreads have compressed as lender appetite returns.

Continuation funds and GP-led secondaries also featured prominently, allowing managers to extend hold periods for high-quality assets.

Regulatory scrutiny remains elevated, particularly around fee transparency and conflicts in continuation vehicles. New guidelines are expected in 2026.

For limited partners, the deployment surge is welcome after years of subdued activity. Exit volumes are projected to rise meaningfully next year as held assets mature.

The resurgence bodes well for broader capital markets, potentially boosting IPO and M&A activity.